Mastermind of $18M Navy kickbacks gets 10 years

By Michelle R. Smith
Associated Press

Published: Friday, Nov. 1 2013 12:00 a.m. MDT

Ralph M. Marianoe exits federal court for his sentencing in a Navy kickback scheme, Friday, Nov. 1, 2013, in Providence, R.I. Mariano pleaded guilty in May to conspiracy, theft of government property and tax evasion and was sentenced Friday to 10 years in prison. (Stew Milne, Associated Press)

PROVIDENCE, R.I. — The mastermind of a 15-year kickback scheme that cost the Navy $18 million was sentenced on Friday to 10 years in prison, a sentence a federal judge said was meant to punish as well as send a message to other government employees.

"The next guy that comes along, who has a job that you had, high-paying job, lots of prestige, but wants to game the system," U.S. District Judge Mary Lisi said. "That person needs to think twice. Was it all worth it?"

Ralph M. Mariano, 55, pleaded guilty in May to conspiracy, theft of government property and tax evasion charges. He was a civilian employee of the Navy for 29 years, and had risen to be a chief engineer for the Naval Undersea Warfare Center in Newport. He is one of six people to plead guilty in the case, and the only government employee to do so.

Mariano apologized in court to his family, friends and former co-workers, calling his actions foolish and stupid. He asked Lisi to consider what he called a "very good career record, even though it is blemished at this time," and asked her for leniency.

Ralph M. Mariano walks into federal court for his sentencing in a Navy kickback scheme, Friday, Nov. 1, 2013, in Providence, R.I. Mariano pleaded guilty in May to conspiracy, theft of government property and tax evasion and was sentenced Friday to 10 years in prison. (Stew Milne, Associated Press)

The judge said she would ordinarily take into account Mariano's statements that he has done good deeds in his life, and that he cares for his elderly parents.

"That rings hollow when I consider the devastation you left in your wake," she said from the bench. Those included taxpayers, the Navy and more than 100 people who lost their jobs when the Navy contractor he used to carry out his scheme went under.

She pointed out that Mariano's 82-year-old father is now a convicted felon because he pulled him in to the scheme. She sentenced him to just one month shy of the maximum allowed under sentencing guidelines and ordered him to repay the $18 million stolen from the Navy.

Among the reasons she gave for the stiff sentence was that Mariano has refused to accept responsibility. While he pleaded guilty and apologized in court, he has, since his guilty plea, lodged a series of complaints with the Justice Department of prosecutorial misconduct. In those complaints, which he sent to the judge, he denied the scheme.

Rear Adm. David Duryea leaves federal court after speaking during the sentencing of Ralph M. Mariano, Friday, Nov. 1, 2013, in Providence, R.I. Mariano pleaded guilty in May to conspiracy, theft of government property and tax evasion and was sentenced Friday to 10 years in prison. (Stew Milne, Associated Press)

U.S. Attorney Peter Neronha would not comment on the complaints other than to say that the assistant U.S. attorneys involved in the case have integrity that is unquestioned.

Mariano was assigned to the Naval Sea Systems Command headquarters in Washington and was living in South Arlington, Va., when he was indicted in 2011.

Prosecutors say his job gave him the ability to authorize or refuse payments to contractors, and he used that power to approve payments to Georgia-based contractor Advanced Solutions for Tomorrow, or ASFT. In return, the now-defunct contractor, which also had an office in Middletown, R.I., funneled kickbacks to him and others.

In court on Friday, prosecutor Lee Vilker said Mariano had received about $5 million of the kickbacks, while his father, brother, sister and girlfriend collected several million more. He spent $500,000 on luxury cigars alone. His lawyer says he is now destitute.

Five other people pleaded guilty in the case, including ASFT founder Anjan Dutta-Gupta; Mariano's girlfriend, Mary O'Rourke, who was also an ASFT executive; ASFT executive Patrick Nagle, of Marietta, Ga.; ASFT subcontractor Russell Spencer; and Mariano's father, Ralph Mariano Jr. Mariano's father was previously sentenced to 2 years of home confinement for tax evasion. The others have are set to be sentenced this month and in December.

Rear Adm. David Duryea, commander of the Naval Undersea Warfare Center, attended the hearing and asked the judge for a stiff sentence for everyone involved. He said after the sentencing that the Naval Undersea Warfare Center had aggressively looked at how it conducted its business and had found no signs of similar schemes. He said they have retrained everyone who is involved in contracts and instituted additional reviews on contracting so a similar scheme won't happen again.